Bessette/Pitney’s AMERICAN GOVERNMENT AND POLITICS: DELIBERATION, DEMOCRACY AND CITIZENSHIP reviews the idea of "deliberative democracy." Building on the book, this blog offers insights, analysis, and facts about recent events.

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Friday, October 24, 2014

Work for Interest Group, Get Rich

Compensation for the leaders of these higher ed groups – which are considered nonprofits by the IRS – has climbed in recent years.

Twenty-seven of 48 association heads earned about as much or more than the median salary for a university president, which was about $400,000 in 2012-13.

The highest-paid sitting association leader is Mark Emmert of the National Collegiate Athletic Association. He earned $1.7 million from fall 2012 to fall 2013.

The second-highest-paid sitting leader, Michael Lomax, runs the United Negro College Fund. The UNCF, as it is known, supports the nation’s private historically black colleges – many of which are struggling financially – and provides scholarships for students from low-income families. Lomax earned over $1.4 million from spring 2012 to spring 2013, including $101,000 in performance-based incentives and $695,000 in retirement payouts from his previous eight years as UNCF’s leader.

... A more recent look by executive compensation firm Quatt Associates, conducted on behalf of the Secretariat members themselves in 2014, found the median compensation of its associations' CEOs was $419,000 per year.

Some of the associations are active in trying to fend off regulatory efforts, including President Obama’s plan for a college rating system and federal efforts to protect students from sexual assault. Others have lobbied for the government to increase aid to students or to institutions. Stills others’ bread and butter is simply selling tests to high school and college students, like the ACT, SAT and GRE.

Senator Chuck Grassley, who has taken a keen interest in higher education salary and benefits, said it’s been clear for a while that tax-exempt organizations tend to use the same few salary-setting firms to get salary recommendations.

Ten of the top trade association heads brought in a total of more than $37 million for the 2011 tax year, according to numbers recently compiled by CEO Update. The top earner was Edison Electric Institute’s Tom Kuhn, who reported $6.7 million in compensation. The U.S. Chamber of Commerce’s Tom Donohue made $4.9 million.

It wasn’t always this way. Bill Clinton made headlines in 2000 when movie execs reportedly offered him a multimillion-dollar deal to run the movie lobby. Nowadays, trade group chiefs can pull down 10 or 15 times the U.S. president’s $400,000 salary by working the Hill for energy, banking or other industries.

The difference now? A mix of worry and self-protectiveness on the part of top industries, at a time when Washington can have a dramatic effect on a company’s bottom line, and when even the fear of a regulatory or legislative change is enough to cause these trade groups to launch defensive action.